The significant international presence of Spanish banks provides welcome diversification
effects but may also have significant implications for inward and outward spillovers. The share
of financial assets abroad has grown continuously for the Spanish banking sector, with the largest
international exposures by financial assets concentrated in the United Kingdom, the United States,
Brazil, Mexico, Turkey and Chile. Spanish subsidiaries are systemically important for the banking
system in several host countries. To some extent, spillovers could be mitigated by the Spanish
subsidiary model characterized by a large share of local funding in local currency and a relatively
high degree of autonomy of risk management practices.